Bali Halts New Hotel, Homestays and Villa Construction

Kompas reports that following criticism and input from a number of sources insisting Bali's environment is under severe threat, the Provincial Government of Bali has decided to refuse new permits for hotels, homestays and new villas in all regencies and cities on the island with effect from Wednesday, April 8, 2009.

The Head of the Development Planning Agency (Bappenda), Nengah Suarca, has announced the major change in policy, saying: "This moratorium is not yet a part of a provincial law or a governor's decree. The plan is that the moratorium will remain in place without a time limit. However, hotel developments holding permits issued before 2009 will be permitted to continue."

Suarca told the press that his office would no longer tolerate the building of hotels and similar sorts of developments by investors or candidate investors. Suarca said: "This is an important and priority factor to the future of Bali's development, both in the current year's plan and in the long term. When this (moratorium) will be lifted, I can't promise because of the desire that no more (developments) be built."

He went on to explain that in addition to ecological considerations, the over-supply of hotel and other accommodation renders requests for new projects on an island as small as Bali non-relevant. Current data supplied by the Bappenda Bali estimates that the number of hotels and in legal and illegal villas is around 50,000 rooms when the ideal total is believed to be 25,000.

At a public meeting to discuss development for 2010, Bali decided to make preserving its environment as a chief priority after the relief of poverty, improving social welfare and education. In the past, environmental concerns received a low priority among development concerns.

In response to the moratorium, the Secretary of the Bali branch of the Indonesian Hotel and Restaurant Association (PHRI), Perry Markus, said that his organization would not take issue with the decision. At the same time, he said he hoped the government would make the regulations and law on the issue firm and clear.

Data from the Central Bureau of Statistics (BPS) records around 145 hotels operating in Bali with 80% of that total in the Badung regency. At the same time, Bali's Tourism Authority estimates that there are hundreds of illegal commercial villas operating on the island.